Money and Credit Management — Test Answers

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1
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Based on the information in the graph, what is the most reasonable prediction?

A
More people will be able to pay cash for new homes and not need to take out a mortgage.
B
Based on recent trends, fewer people will need mortgages in the future.
C
Rising home prices in recent years means that more people will need to take out mortgages.
D
The cost of a new home in the United States will continue to be inexpensive.
2
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Which best describes a way people can use personal loans?

A
to buy a car
B
to buy a house
C
to pay for college
D
to pay for groceries
3

Which statement describes a disadvantage of Marnie paying a bill by telephone with a credit card or a debit card?

A
Marnie may be eligible for a discount.
B
Marnie’s bill is paid immediately.
C
Marnie will have to share her card account information.
D
Marnie will not have to find a stamp and a mailbox.
5

Kendrick is planning to buy a house. Which explains why he should establish a positive credit history before buying the house?

A
He will be able to get a higher interest rate when buying the house.
B
It will be easier for him to get a loan to buy the house.
C
He will get the house for a lower price.
D
He will be able to find a house he likes more quickly.
7

Which payment option provides consistency in on-time bill payment?

A
submitting an online payment
B
mailing a check
C
making a payment by telephone
D
automatic withdrawal
8

What is the purpose of comparison shopping?

A
determining whether you truly need a product
B
attempting to find the best deal on a product
C
reading reviews to make sure a product is good
D
ensuring you are not buying out of emotion
9

Kenya used a debit card to buy a pair of jeans. Which statement is true about her method of payment?

A
Kenya did not have enough money in her bank account to buy the jeans.
B
Kenya used money directly from her bank account to buy the jeans.
C
Kenya borrowed the money to buy the jeans.
D
Kenya will pay for the jeans over time.
11

Insurance is a financial service that allows a

A
company to control finances for a consumer.
B
company to maximize risk for a consumer.
C
consumer to share liability with a company.
D
consumer to transfer all risk to a company.
13

What is a major difference between retail banks and credit unions?

A
Retail banks manage a person’s money, while credit unions focus on providing loans.
B
Retail banks operate in order to earn profit, while credit unions are nonprofit.
C
Retail banks only serve businesses, while credit unions only serve individuals.
D
Retail banks only have small local branches, while credit unions are nationwide.
14

What is a benefit of obtaining a personal loan?

A
getting money with favorable interest rates
B
getting large amounts of money to use immediately
C
getting small amounts of money to use immediately
D
getting money with special repayment terms
15

Shondra is thinking of making payments for her laptop by setting up automatic withdrawals with the store. What must Shondra consider before she decides to pay with automatic withdrawals?

A
Shondra should be sure she will remember to call the store each month to make the payment.
B
Shondra should consult with a credit counseling service.
C
Shondra should be sure she will have enough in her account to be able to make the monthly payments.
D
Shondra should check her credit history to be sure she has a good credit score.
16

When people take out a mortgage, they must pay back the money

A
when they are able.
B
over time, usually many years.
C
as soon as they can.
D
within a year.
17

What is the major difference between a nationwide bank and a community bank?

A
The nationwide bank services only local customers.
B
The community bank services only local customers.
C
The community bank offers more services.
D
The nationwide bank has fewer branches.
19

People most likely need to take out a mortgage when they

A
have legal problems.
B
have bad credit.
C
are making a large purchase.
D
are spending less than $1,000.

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